LESSON 26 COULD THE U.S. ECONOMY HAVE GROWN WITHOUT THE RAILROADS?
VISUAL 26.1
ECONOMIC GROWTH
IN THE
UNITED STATES, 1870-1900
The U.S. economy expanded rapidly between 1870 and 1900.
• At the end of the Civil War, Americans produced approximately $531
worth of goods and services (Gross National Product, or GNP) per
person.
• By 1900, this amount doubled.
• Transportation advancements between 1870 and 1900 played an
important role by advancing the size of the U.S. marketplace.
✔ Transportation costs fell. It became cheaper to move things and
people from one place to another.
✔ Speed of delivery increased. Things and people moved more
quickly from one place to another.
304
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COULD THE U.S. ECONOMY HAVE GROWN WITHOUT THE RAILROADS? LESSON 26
VISUAL 26.2
MAIN LINE RAILROAD TRACK
UNITED STATES, 1870-1900
Year
Miles of Track
1870
1875
1880
1885
1890
1895
1900
53,000
74,000
93,000
128,000
167,000
180,000
207,000
QUESTIONS
FOR
IN
OPERATION
IN THE
Percentage Increase Over a
Five-Year Period
40
26
38
30
8
15
DISCUSSION
A. Did the railroad network expand or contract between 1870 and 1900?
B. By what percentage did the miles of track servicing the U.S. economy
increase between 1870 and 1900?
Source: Adapted from U.S. Bureau of the Census, Historical Statistics of
the United States, Colonial Times to 1970 (U.S. Government Printing
Office: Washington, D.C., 1960), Part II, Series Q287, page 321.
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LESSON 26 COULD THE U.S. ECONOMY HAVE GROWN WITHOUT THE RAILROADS?
VISUAL 26.3
BENEFITS AND COSTS OF RAILROAD EXPANSION
FOR DIFFERENT MARKET AGENTS: RAILROAD
INDUSTRIALISTS, OTHER INDUSTRIALISTS,
CONSUMERS, FARMERS AND GOVERNMENT
BENEFITS
AND COSTS OF
RAILROAD
EXPANSION
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VISUAL 26.4
VALUE OF FARM GROSS OUTPUT AND PRODUCT
(1910-14) DOLLARS, 1870 - 1900
Gross output total
as measured in constant
(1910-14) dollars
Year
(The numbers below
represent millions
of dollars.)
1870
2,694
1880
4,129
1890
4,990
1900
6,409
IN
CONSTANT
Farm gross product,
including improvements
and manufactures
(This statistic is a measure of agricultural output.
The numbers below
represent millions
of dollars.)
2,597
3,906
4,638
5,837
Source: Adapted from U.S. Bureau of the Census, Historical Statistics of
the United States, Colonial Times to 1970 (U.S. Government Printing
Office: Washington, D.C., 1975), Part I, Series K240-250, page 482.
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LESSON 26 COULD THE U.S. ECONOMY HAVE GROWN WITHOUT THE RAILROADS?
VISUAL 26.5
PRE-CIVIL WAR TRANSPORTATION
In the period before the Civil War, waterways and turnpikes provided
efficient transportation for people, goods and services.
• Shipping cost by water — through canals — was often lower than the
cost of shipping by railroads.
• Most railroad lines ran north and south, and many were located in
close proximity to rivers and canals.
• At this time, railroad lines were small. They were privately owned
and they used non-standardized technology.
• Customers faced relatively high transportation costs when using
railroads.
It is plausible that extending the system of public roads — turnpikes —
and canals could have helped the United States economy to expand after
the Civil War even if the railroad network not been developed.
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VISUAL 26.6
THE OPPORTUNITY COST
OF
RAILROADS
One way to measure the opportunity cost of developing the railroads is to
compare the impact of railroads, as they existed, to the second-best
alternative.
The second-best alternative to railroads at the time was the expansion of
waterways and roads that existed before the Civil War.
HOW
TO
MEASURE
THE
IMPACT
OF
RAILROADS
The net contribution of railroads to the U.S. economy during industrialization can be determined by two steps:
• Estimate the value of total output (Gross National Product or GNP)
produced in the presence of railroads
• Subtract the estimated GNP produced in the hypothesized presence
of the second-best alternative — waterways and turnpikes.
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LESSON 26 COULD THE U.S. ECONOMY HAVE GROWN WITHOUT THE RAILROADS?
VISUAL 26.7
ESTIMATING THE CONTRIBUTION OF
RAILROADS TO ECONOMIC GROWTH
• Economic historians Albert Fishlow and Robert Fogel estimated that
railroads boosted GNP in 1859 (Fishlow) and in 1890 (Fogel) by no
more than 5 percent.
• They concluded that industrialization would have proceeded in the
absence of railroads.
• According to this line of analysis, railroads were important, late in
the nineteenth century, but they were not an indispensable form of
transportation.
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